SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 2002
Commission File Number 0-23539
LADISH CO., INC.
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(Exact name of registrant as specified in its charter)
Wisconsin 31-1145953
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(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5481 South Packard Avenue, Cudahy, Wisconsin 53110
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(Address of principal executive offices) (Zip Code)
(414) 747-2611
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(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at September 30, 2002
- ----------------------------- ---------------------------------
Common Stock, $0.01 Par Value 13,023,393
Page 2 of 13
PART I - FINANCIAL INFORMATION
Page 3 of 13
LADISH CO., INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Share and Per Share Data)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
Restated Restated
2002 2001 2002 2001
---- ---- ---- ----
Net sales ...................................... $ 42,790 $ 59,524 $ 144,255 $ 196,412
Cost of sales .................................. 39,919 52,071 133,400 169,878
------------ ------------ ------------ ------------
Gross income on sales ................. 2,871 7,453 10,855 26,534
Selling, general and administrative expenses ... 1,394 1,558 6,732 8,214
------------ ------------ ------------ ------------
Income from operations ................ 1,477 5,895 4,123 18,320
Other income (expense):
Interest expense .......................... ( 468 ) ( 544 ) ( 1,336 ) ( 1,448 )
Other, net ................................ 8 36 80 20
------------ ------------ ------------ ------------
Income from operations before provision
for income taxes ................... 1,017 5,387 2,867 16,892
Provision for income taxes ..................... 366 1,940 1,032 6,081
------------ ------------ ------------ ------------
Net income ............................ $ 651 $ 3,447 $ 1,835 $ 10,811
============ ============ ============ ============
Basic earnings per share ....................... $ 0.05 $ 0.27 $ 0.14 $ 0.84
Diluted earnings per share ..................... $ 0.05 $ 0.26 $ 0.14 $ 0.82
Basic weighted average shares outstanding ...... 13,021,156 12,965,055 12,995,090 12,933,924
Diluted weighted average shares outstanding .... 13,083,790 13,225,001 13,124,664 13,172,065
Page 4 of 13
LADISH CO., INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Share and Per Share Data)
Restated
September 30, December 31,
Assets 2002 2001
------ ---- ----
Current assets:
Cash and cash equivalents.................................................. $ 5,851 $ 3,962
Accounts receivable, less allowance of $341................................ 33,413 37,719
Inventories................................................................ 48,412 53,059
Deferred income taxes...................................................... 5,643 5,643
Prepaid expenses and other current assets.................................. 1,278 635
--------- ---------
Total current assets................................................... 94,597 101,018
--------- ---------
Property, plant and equipment:
Land and improvements...................................................... 4,828 4,637
Buildings and improvements................................................. 35,016 27,521
Machinery and equipment.................................................... 148,871 139,174
Construction in progress................................................... 9,691 19,271
--------- ---------
198,406 190,603
Less - accumulated depreciation............................................ ( 98,882 ) ( 88,320 )
--------- ---------
Net property, plant and equipment...................................... 99,524 102,283
Deferred income taxes........................................................... 16,292 17,535
Other assets .................................................................. 17,067 11,834
--------- ---------
Total assets........................................................... $ 227,480 $ 232,670
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable........................................................... $ 16,132 $ 21,235
Accrued liabilities:
Pensions............................................................... 825 153
Postretirement benefits................................................ 5,308 5,308
Wages and salaries..................................................... 4,861 4,111
Taxes, other than income taxes......................................... 225 263
Interest............................................................... 454 1,002
Profit sharing....................................................... -- 812
Paid progress billings................................................. 417 473
Other.................................................................. 1,602 2,486
--------- ---------
Total current liabilities......................................... 29,824 35,843
Long term liabilities:
Senior notes............................................................... 30,000 30,000
Postretirement benefits.................................................... 36,115 37,286
Pensions .................................................................. 2,692 2,599
Other noncurrent liabilities............................................... 602 605
--------- ---------
Total liabilities................................................. 99,233 106,333
--------- ---------
Stockholders' equity:
Common stock - authorized 100,000,000, issued 14,573,515
shares in each period of $.01 par value.................................. 146 146
Additional paid-in capital................................................. 109,767 110,038
Retained earnings.......................................................... 29,810 27,975
Treasury stock, 1,550,122 and 1,597,455 shares of common stock
in each period at cost................................................... (11,349 ) ( 11,695 )
Additional minimum pension liability....................................... ( 127 ) ( 127 )
--------- ---------
Total stockholders' equity........................................ 128,247 126,337
--------- ---------
Total liabilities and stockholders' equity........................ $ 227,480 $ 232,670
========= =========
Page 5 of 13
LADISH CO., INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
For the Nine Months
Ended September 30,
-------------------
Restated
2002 2001
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................................. $ 1,835 $ 10,811
Adjustments to reconcile net income to net cash
provided from (used for) operating activities:
Depreciation........................................................... 11,488 10,918
Amortization........................................................... -- 398
Deferred income taxes.................................................. 865 5,750
Non-cash compensation income related to stock options.................. ( 306 ) ( 294 )
Other.................................................................. ( 41 ) --
Change in assets and liabilities:
Accounts receivable.................................................... 4,306 ( 5,836 )
Inventories............................................................ 4,647 ( 1,816 )
Other assets........................................................... ( 5,498 ) ( 792 )
Accounts payable and accrued liabilities............................... ( 6,019 ) ( 3,017 )
Other long-term liabilities............................................ ( 1,081 ) ( 6,922 )
---------- ---------
Net cash provided from operating activities....................... 10,196 9,200
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment................................. ( 8,866 ) ( 12,113 )
Proceeds from sale of property, plant and equipment........................ 178 5
---------- ---------
Net cash used for investing activities............................ ( 8,688 ) ( 12,108 )
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of senior bank debt.............................................. -- ( 25,000 )
Proceeds from senior notes................................................. -- 30,000
Issuance of common stock................................................... 381 399
Retirement of warrants..................................................... -- ( 3,227 )
Repurchase of common stock................................................. -- ( 47 )
---------- ---------
Net cash provided from financing activities....................... 381 2,125
---------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS................................ 1,889 ( 783 )
CASH AND CASH EQUIVALENTS, beginning of period.................................. 3,962 3,521
---------- ---------
CASH AND CASH EQUIVALENTS, end of period........................................ $ 5,851 $ 2,738
========== =========
Page 6 of 13
LADISH CO., INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands, Except Earnings Per Share)
(1) Basis of Presentation
In the opinion of the Company, the accompanying unaudited consolidated condensed
financial statements contain all adjustments necessary to present fairly its
financial position at September 30, 2002 and December 31, 2001 and its results
of operations and cash flows for the nine months ended September 30, 2002 and
September 30, 2001. The Company's financial position as of December 31, 2001 and
results of operations as of September 30, 2001 have been restated. All
adjustments are of a normal recurring nature.
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with Article 10 of Regulation S-X and therefore do not
include all information and footnotes necessary for a fair presentation of the
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. The Company has filed an amended
report on Form 10-K/A which contains restated audited consolidated financial
statements that include all information and footnotes necessary for a fair
presentation of its financial position at December 31, 2001, 2000 and 1999, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for the years ended December 31, 2001, 2000 and 1999.
The results of operations for the nine-month period ended September 30, 2002 are
not necessarily indicative of the results to be expected for the full year.
(2) Inventories
Inventories consisted of:
September 30, December 31,
2002 2001
---- ----
Raw material and supplies $ 12,158 $ 16,995
Work-in-process and finished goods 37,407 37,058
Less progress payments ( 1,153 ) ( 994 )
--------- ---------
Total inventories $ 48,412 $ 53,059
========= =========
(3) Interest and Income Tax Payments
For the Nine Months
Ended September 30,
-------------------
2002 2001
---- ----
Interest $ 1,836 $ 1,332
Income taxes 224 807
Page 7 of 13
(4) Cash and Cash Equivalents
Cash in excess of daily requirements is invested in marketable securities
consisting of Commercial Paper and Repurchase Agreements which mature in three
months or less. Such investments are deemed to be cash equivalents.
(5) Revenue Recognition
Revenue is recognized when products are shipped pursuant to firm, fixed-price
written contracts with title to the products passing to the customers at the FOB
point.
(6) Earnings Per Share
The incremental difference between basic weighted average shares outstanding and
diluted weighted average shares outstanding is due to the dilutive impact of
outstanding options and warrants.
(7) Goodwill
The Company adopted the provisions of SFAS No. 142 on January 1, 2002. With the
adoption of SFAS No. 142, goodwill is no longer amortized. Rather, the assets
associated with the goodwill will be assessed, at least annually, for
impairment. During the quarter ending March 31, 2002, the Company performed the
first of the annual impairment tests of goodwill. The results of those tests
revealed that the goodwill of the Company has not been impaired. As of September
30, 2002, the Company had approximately $8.2 million of goodwill on its balance
sheet. On a yearly basis, prior to the adoption of SFAS No. 142, the Company's
annual expense associated with the amortization of goodwill was approximately
$.49 million.
(8) Restatement of 2001 Interim Financial Statements
The 2001 provision for income taxes was previously reported using an implied tax
rate of 20% and has been restated to use an effective tax rate of 36%. The
effect of such change was to increase tax expense by $0.863 million and $2.703
million, respectively, for the three-month period and nine-month period ended
September 30, 2001. The effect of such change also reduced net income and
diluted earnings per share by $0.863 million and $0.07 for the three-month
period and $2.703 million and $0.21 for the nine-month period ended September
30, 2001.
Page 8 or 13
Management's Discussion
and Analysis of Results of Operations and
Changes in Financial Position
RESULTS OF OPERATIONS
Third Quarter 2002 Compared to Third Quarter 2001
Net sales for the three months ended September 30, 2002 were $42.8 million
compared to $59.5 for the same period in 2001. The significant decrease in sales
for the third quarter of 2002 was due to the continued downturn of the aerospace
market, particularly after September 11, 2001. Gross profit for the third
quarter of 2002 declined to 6.7% of sales in contrast to 12.5% of sales in the
third quarter of 2001 primarily as a result of product mix, margin pressures in
2002 and lack of sales volume.
Selling, general and administrative expenses, as a percentage of sales, were
3.3% for the third quarter of 2002 compared to 2.6% for the same period in 2001.
The variation in SG&A expenses between the periods was attributable to the
Company's recognition of approximately $1.1 million in non-cash income in 2001
and $0.7 million in 2002 as a result of the impact of FASB Interpretation No. 44
("FIN 44") on stock option programs. Under the provisions of FIN 44, 320,000
options repriced at $8.25 per share are accounted for under variable accounting,
which records compensation expense or benefit for increases or decreases in the
market value of the Company's common stock until the options are exercised,
forfeited or expire. Adjusting for this non-cash item would have resulted in
SG&A expenses being 4.9% of sales in the third quarter of 2002 and 4.5% of sales
in the same period of 2001.
Interest expense for the period was $0.468 million in contrast to $0.544 million
in 2001. During the third quarter of 2002, the Company's revolving debt had an
interest rate equal to the LIBOR rate plus 0.80% per annum and the senior notes
earn interest at the rate of 7.19% per annum.
The provision for income taxes for the three-month period in 2001 has been
restated from that previously reported. See Note 8 to the consolidated financial
statements. The $0.37 million provision for income taxes for 2002 and $1.9
million for 2001, 36% for each period, represent largely non-cash accounting
charges. The Company has significant net operating loss ("NOL") carryforwards
which largely offset most actual tax liabilities of the Company. For financial
statement purposes the Company uses an effective tax rate which reflects federal
and state taxes without a reduction for actual NOL usage. See "Liquidity and
Capital Resources."
Net income for the third quarter of 2002 was $0.65 million, an 81% decline from
the same period in 2001. The decrease in profitability was due to lower sales
volume in 2002 and margin pressure from customers.
Nine Months 2002 Compared to Nine Months 2001
For the first nine months of 2002, sales of $144.3 million reflected a 26.6%
decrease from the $196.4 million of sales for the first three quarters of 2001.
The sales shortfall reflects a contraction in the Company's aerospace market.
Gross profit in the first nine months of 2002 was 7.5% in comparison to 13.5% in
the same period in 2001. The decline in gross profit is primarily due to reduced
volume of sales and under absorption of fixed costs in 2002 versus 2001 and
continued margin pressure from major customers.
Page 9 of 13
SG&A expenses for the first three quarters of 2002 were 4.7% of sales in
contrast to 4.2% of sales through September 30, 2001. As discussed above in the
quarter discussion, the variation in SG&A expense is largely attributable to the
non-cash, FIN 44 charges and credits. On a normalized basis, the Company's SG&A
expenses typically approximate 4.9% of sales.
Interest expense in the first nine months of 2002 of $1.34 million compares
favorably to the $1.45 million in 2001.
The provision for income taxes for the nine-month period ended September 30,
2001 has been restated from that previously reported. See Note 8 to the
consolidated financial statements. As discussed above, the tax provisions of
$1.0 million and $6.1 million, 36%, for the first nine months of 2002 and 2001,
represent largely non-cash accounting charges. The Company has significant NOL
carryforwards which largely offset most actual tax liabilities of the Company.
Net income for the period decreased to $1.8 million from $10.8 million in the
prior year. The decline in net earnings is attributable to significantly reduced
sales volume which resulted in under absorption of fixed costs, unfavorable
product mix and margin pressure from customers.
Liquidity and Capital Resources
On April 13, 2001, the Company and a syndicate of lenders entered into an
amended and restated credit facility (the "New Facility"). The New Facility was
comprised of a $16 million term facility with a three-year maturity and a $39
million revolving loan facility. The term facility bore interest at a rate of
LIBOR plus 1.25% and the revolving loan facility bears interest at a rate of
LIBOR plus 0.80%.
On July 20, 2001, the Company sold $30 million of Notes in a private placement
to certain institutional investors. The Notes bear interest at a rate of 7.19%
per annum with the interest being paid semiannually. The Notes have a seven-year
duration with the principal amortizing equally over the remaining duration after
the third year. The Company used the proceeds from the Notes to repay
outstanding borrowings under the New Facility and for working capital purposes.
In conjunction with the private placement of the Notes, the Company and the
lenders in the New Facility amended the New Facility on July 17, 2001 (the
"Amended Facility"). The Amended Facility consists of a $50 million revolving
line of credit which bears interest at a rate of LIBOR plus 0.80%. On April 12,
2002, the Amended Facility was modified to reduce the revolving line of credit
to $45 million. At September 30, 2002, $16.8 million was available pursuant to
the terms of the Amended Facility. There were no borrowings under the Amended
Facility as of September 30, 2002.
The Company has NOL carryforwards that were generated prior to its
reorganization that was completed on April 30, 1993, as well as NOL
carryforwards that were generated in subsequent years. The total remaining NOL
carryforwards were approximately $21.2 million as of December 31, 2001. The NOL
carryforwards expire gradually beginning in the year 2008 through 2010.
The Company's initial public offering created an ownership change as defined by
the Internal Revenue Service, ("IRS"). This ownership change generated an IRS
imposed limitation on the utilization of NOL carryforwards on future tax
returns. The annual use of the NOL carryforwards is limited to the lesser of the
Company's taxable income or the amount of the IRS imposed limitation.
Approximately $11.9 million of the NOL carryforwards is available for use
annually. Approximately $2.1 million of the $11.9 million annual limitation
relates to a previous restriction on NOL carryforwards generated prior to its
reorganization.
Page 10 of 13
Realization of the net deferred tax assets of $21.9 million, which includes the
benefit of the NOLs, over time is dependent upon the Company generating
sufficient taxable income in future periods. In determining that realization of
the net deferred tax assets was more likely than not, the Company gave
consideration to a number of factors including its recent earnings history,
expectations for earnings in the future, the timing of reversal of temporary
differences, tax planning strategies available to the Company and the expiration
dates associated with NOL carryforwards. If, in the future, the Company
determines that it is no longer more likely than not that the net deferred tax
assets will be realized, a valuation allowance will be established against all
or part of the net deferred tax assets with an offsetting charge to the income
tax provision.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company believes that its exposure to market risk related to changes in
foreign currency exchange rates and trade accounts receivable is immaterial as
all of the Company's sales are made in U.S. dollars. The Company does not
consider it subject to the market risks addressed by Item 305 of Regulation S-K.
------------------------
Any statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Legislation Reform Act of 1995, and involve risks and uncertainties. These
forward-looking statements include expectations, beliefs, plans, objectives,
future financial performance, estimates, projections, goals and forecasts.
Potential factors which could cause the Company's actual results of operations
to differ materially from those in the forward-looking statements include:
o Market Conditions and demand for the Company's products
o Interest rates and capital costs
o Unstable governments and business conditions in emerging economies
o Legal, regulatory and environmental issues
o Competition
o Technologies
o Raw material prices
o Taxes
Any forward-looking statement speaks only as of the date on which such statement
is made. The Company undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which such
statement is made.
Item 4. Procedures and Controls
The registrant's certifying officers have evaluated the effectiveness of the
design and operation of the Company's internal controls and disclosure controls
and procedures within 90 days prior to the date of this quarterly report. Based
upon that review, the certifying officers have concluded that the internal
controls and disclosure controls and procedures are effectively operating to
ensure that material information relating to the Company and its consolidated
subsidiaries is made known to such officers by others within those entities,
particularly during the period in which this quarterly report was being
prepared. The review of internal controls and disclosure controls and procedures
did not reveal any significant deficiencies in the design or operation, which
could adversely affect the Company's ability to record, process, summarize and
report financial data. The Company did not discover any material weaknesses in
these controls or procedures, nor did the Company discover any fraud of any kind
involving management or other employees who have a significant role in the
Company's internal controls. There were no significant changes in the internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of evaluation, including any corrective actions taken
with regard to significant deficiencies or material weaknesses, and there are no
corrective
Page 11 of 13
actions contemplated as of the date of this report. The Company did not identify
any significant changes that need to be made to ensure the effectiveness of the
internal controls or the disclosure controls and procedures. Nor did the Company
identify any other factors that could materially affect the internal controls
occurring after the date of our certification.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the stockholders during the period
covered by this report.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 99(a) is the written statement of the chief executive officer of
the Company certifying this Form 10-Q complies with the requirements of
Section 13(a) of the Securities Exchange Act of 1934.
Exhibit 99(b) is the written statement of the chief financial officer of
the Company certifying this Form 10-Q complies with the requirements of
Section 13(a) of the Securities Exchange Act of 1934.
(b) A Form 8-K was filed on July 16, 2002 supplementing the information
contained in the Form 8-K filed on June 28, 2002.
A Form 8-K was filed on August 26, 2002 announcing the resignation of
Deloitte & Touche LLP as the Company's independent auditors.
A Form 8-K/A was filed on September 4, 2002 supplementing the information
contained in the Form 8-K filed on August 26, 2002.
A Form 8-K was filed on September 10, 2002 announcing the appointment of
KPMG LLP as the Company's new independent auditors.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LADISH CO., INC.
Date: November 11, 2002 By: /s/ WAYNE E. LARSEN
----------------- ---------------------------
Wayne E. Larsen
Vice President Law/Finance
& Secretary
Page 12 of 13
CERTIFICATION
I, Kerry L. Woody, President and CEO of Ladish Co., Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Ladish Co., Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 11, 2002
/s/ Kerry L. Woody
- --------------------------
Kerry L. Woody
President and CEO
Page 13 of 13
CERTIFICATION
I, Wayne E. Larsen, Vice President Law/Finance and Secretary of Ladish Co.,
Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Ladish Co., Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 11, 2002
/s/ Wayne E. Larsen
- --------------------------------------
Wayne E. Larsen
Vice President Law/Finance & Secretary